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As filed with the Securities and Exchange Commission November 21, 2000
File No. 333-35496
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NORSTAR GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
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Utah 59-1643698
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
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6365 NW 6th Way, Suite 160
Fort Lauderdale, Florida 33309
(Address of Principal Executive Offices)
Employment Agreements
(Full title of the plan)
Harry DiFrancesco, President
6365 NW 6th Way, Suite 160, Fort Lauderdale, FL 33309
(Name and address of agent for service)
(954) 772-0240
(Telephone number, including area code, of agent for service)
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Copies to:
Jeffrey A. Rinde, Esq.
Bondy & Schloss LLP
6 East 43rd Street, 25th Floor
New York, New York 10017
Phone: (212) 661-3535
Fax: (212)972-1677
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CALCULATION OF REGISTRATION FEE
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Proposed
Proposed Maximum Maximum
Title of Securities Amount to be Offering Price Per Aggregate Offering Amount of
to be Registered Registered Share Price Registration Fee
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Common Stock, par value 2,000,000 shares(1) $0.375 $750,000 $1,980(2)
$.01 per share
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Common Stock, par value 1,260,00 shares(1) $0.40 $ 504,000 $1,331(3)
$.01 per share
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Common Stock, par value 1,200,000 shares(1) $0.375 $450,000 $1,188(4)
$.01 per share
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Common Stock, par value 300,000 shares(1) $0.375 $112,500 $ 297(5)
$.01 per share
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TOTAL $1,816,500 $4,796(6)
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(1) Represents shares of common stock registered by Norstar Group, Inc. on
Form S-8, file number 333-35496, filed with the Securities and Exchange
Commission on April 24, 2000.
(2) Estimated solely for purposes of calculating the filing fees and
calculated pursuant to Rule 457(c) under the Securities Act based upon the
average of the bid and asked price as of April 17, 2000.
(3 Calculated pursuant to Rule 457(h)(1) under the Securities Act based upon
the exercise price for the shares of common stock underlying the option.
(4)Estimated solely for purposes of calculating the filing fees and calculated
pursuant to Rule 457(c) under the Securities Act based upon the average of the
bid and asked price as of April 17, 2000.
(5) Estimated solely for purposes of calculating the filing fees and
calculated pursuant to Rule 457(c) under the Securities Act based upon the
average of the bid and asked price as of April 17, 2000.
(6) Fee previously paid.
EXPLANATORY NOTE
This registration statement is being filed as a post-effective amendment
to Registration Statement on Form S-8 (Registration No. 333-35496) filed with
the Securities and Exchange Commission on April 24, 2000.
This registration statement registers reoffers and resales of shares of
common stock, issued under certain employment agreements that may constitute
"control securities" under General Instruction C to Form S-8. These control
securities may be re-offered and resold on a continuous or delayed basis in the
future under Rule 415 of the Securities Act of 1933, as amended (the "Securities
Act").
This registration statement contains two parts. The first part contains a
"reoffer prospectus" prepared in accordance with Part I of Form S-3 (in
accordance with Instruction C of Form S-8). The second part contains information
required in the registration statement pursuant to Part II of Form S-8.
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REOFFER PROSPECTUS
NORSTAR GROUP, INC.
1,200,000 Shares of Common Stock
under Employment Agreements
of Norstar Group, Inc.
The shares we are registering are currently held by certain of our
stockholders under certain employment agreements. We will pay the expenses of
registering the shares.
Our common stock is quoted on the Nasdaq Over-The-Counter Bulletin Board
under the symbol "NSTG." The last reported sale price of the common stock on the
Nasdaq National Market on November 17, 2000 was $0.21 per share.
You should carefully consider the "Risks Factors" section beginning on
page 6 of this Reoffer Prospectus.
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These shares have not been approved by the Securities and Exchange
Commission or any state securities commission nor have these organizations
determined whether this Prospectus is complete or accurate. Any representation
to the contrary is a criminal offense.
The date of this Reoffer Prospectus is November 21, 2000.
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TABLE OF CONTENTS
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Page
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ABOUT NORSTAR GROUP, INC................................................ 3
RISK FACTORS............................................................ 6
PROCEEDS FROM SALE OF THE SHARES........................................ 14
SELLING STOCKHOLDERS ................................................... 14
HOW THE SHARES MAY BE DISTRIBUTED....................................... 15
LEGAL OPINION........................................................... 17
EXPERTS................................................................. 17
WHERE YOU CAN FIND MORE INFORMATION..................................... 17
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE....................... 17
INDEMNIFICATION OF DIRECTORS AND OFFICERS .............................. 18
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PROSPECTUS SUMMARY
This is only a summary and does not contain all of the information that
may be important to you. You should read the more detailed information contained
in this prospectus and all other information, including the financial
information and statements with notes, referred to in this prospectus as
discussed in the "Where You Can Find More Information" section of this
prospectus.
ABOUT NORSTAR GROUP, INC.
NorStar Group, Inc., a Utah Corporation ("NorStar" or the "Company") was
originally formed in March 1961 as Florist Accounting Service, Inc. The Company
changed its name in 1971 to Luxor Group N.A., Inc. and in 1992 to NorStar Group,
Inc. NorStar has not been the subject of any bankruptcy, receivership or similar
proceeding. There has been no material reclassification, merger, consolidation,
or sale of a significant amount of assets not in the ordinary course of the
Company's business. NorStar has made a number of acquisitions over the last few
years of businesses and investment opportunities. In January, 1998, NorStar
entered into an agreement to acquire in their entirety, the Institute of
Metabolic Medicine, Metabolic Treatment Center, Inc., JBA Medical Management,
Inc., and Medical Providers of South West Florida, Inc. In April, 1992, NorStar
also acquired 680 acres (17 gold mining claims) in Nevada. In March of 1999
NorStar abandoned the medical venture to concentrate on its Internet on-line
business. NorStar is seeking a joint venture partner to work its mining claims.
The business of NorStar is to create an Internet online-community of "One
Stop Shopping" for products, entertainment, education and business services from
a network of providers. NorStar's portal will provide the subscriber/member with
access to several web browsers, a directory of thousands of stores, an Internet
shopping mall, three dimensional virtual reality chat rooms, telephone chat,
forums, game rooms, a virtual reality dating service, virtual reality business
conference rooms using virtual reality chat room technology, specialty
advertising rooms with virtual reality activities, and global e-mail service
which can be accessed through the web anywhere in the world.
Membership
NorStar intends to offer membership to the 100 million consumers who
currently have, or who will have some form of access to the Internet. Consumers
subscribing to NorStar's network will be offered discounts for products and
services through the Company's provider network. NorStar's strategy is to
address the trend toward rising out of pocket costs by bringing together a
provider network that offers quality products and services at reduced prices.
The Company believes that by having access to an extensive multi-service
provider network in a region its members will be able to receive quality
services and products at less than market prices. As a result, NorStar believes
that it can establish a market niche where the discounts obtained by the
membership will far outweigh the cost of membership to join the NorStar network.
The cost for annual family membership is $120.00. NorStar discounts are designed
not to be related in any way to the dollar amount of purchases, volume of buying
or products so members will not be subject to any minimum requirements or other
restrictions. The member is simply being provided these programs based on
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the willingness of service and product providers to offer their services and
products to customers of the Company at a discount.
Providers
The foundation of the Company's business will be the development and
maintenance of a network of providers comprised of manufacturers, wholesalers,
retailers and service providers. NorStar intends that providers who participate
in the NorStar network will receive some of the following benefits, including
but not limited to: elimination of paper order form preparation and supporting
documentation, reduction of bad debt, new customers with no additional
advertising expense, and more efficient utilization of personnel and equipment.
The national and regional marketing planned by the Company should give providers
an increased level of exposure. The Company will also contract with reliable
suppliers who offer computer network accessible products and services. It is the
Company's objective to establish a national network of providers within 3 years
through direct contracts, affiliations with national organizations and other
regional networks. NorStar anticipates having an appropriate number of providers
under contract and available on the net in the near future. The distribution
method of these products and services to holders of membership will be via the
Internet. No assurances can be given that the Company will be successful in
establishing a national network. The failure to establish a national network
would have a material adverse effect on the Company's business, financial
condition and results of operations.
Market Overview
The market for discount products and services via the Internet is in its
infancy. The level of demand and acceptance of discount products and services
programs is dependent upon a number of factors, including growth of consumer
access to the Internet, the Company's ability to develop and maintain
distribution channels to sell memberships to consumers, acceptance of discounted
products and services and the willingness of service and product providers to
offer their services and products to customers at a discount. The Company
believes that competition will intensify and increase in the future. NorStar
views its primary direct competitors as AOL, Compuserve, Prodigy, Yahoo, and
GeoCities.
Summary of Product Research and Development
NorStar's publicly announced new product and service includes the
Cybervisor(TM) which is still in the research and development stage. NorStar
filed a Trademark Application for The "Cybervisor(TM)" a head mounted display
unit with related hardware and software INT. Class:009 The mark consists of text
letters (the Cybervisor) Serial number 75/710459. NorStar announced that its
Cybervisor (TM) IPD (Interactive Personal Display) unit will be offered in the
marketplace for home, business and school use. NorStar plans to introduce three
IPD models: The Cybervisor (TM), The Super Cybervisor (TM), and the Cybervisor
Jr.(TM). In addition, NorStar has completed development of a new Web based
community called"VeeAreCity.Com". VeeAreCity.Com, Inc., a Delaware corporation
and wholly-owned subsidiary of the Company ("VeeAreCity") owns and will operate
the Web site. The physical tooling developed for the VeeAreCity Head Mounted
Display ("HMD") appearance will be owned by VeeAreCity. The tooling for the HMD
will be located at Interactive Imaging Systems ("IIS"), the manufacturer. As a
significant portion of this HMD design is based on proprietary IIS technology,
IIS will retain the rights, title and ownership
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to this technology. In the event IIS is unable or unwilling to manufacture the
HMD, VeeAreCity will be granted certain rights to have the product manufactured
by a mutually agreed upon third party, at the anticipated volume levels of
100,000 units/year. IIS estimates that it will be able to manufacture the HMD
for VeeAreCity at a per unit cost of approximately $200. This price is subject
to change up or down based on the final product specifications. NorStar also
plans to begin construction of its "Cybernizer" a web pager. In addition, the
Cybernizer will be a Internet navigation tool that will include such features as
voice chat and instant access to all major search engines. The estimated cost
for the development of this project is between $900,000 and $1.1 million. The
source for funding the research and development of this project will come from
additional equity and/or debt financing. No assurance can be given that the
Company will raise the necessary capital to complete this project, or if
completed that it will be accepted in the marketplace.
NorStar has spent approximately $20,000 during the last two fiscal years
on research and development activities. NorStar employs seven full time
employees, four of whom serve as Officers and Directors of NorStar.
Our principal corporate office is located at 6365 NW 6th Way, Suite 160,
Ft. Lauderdale, Florida, and our telephone number is (954) 772-0240.
The Offering
The selling stockholders may offer and sell up to 1,200,000 shares of our
common stock under this Reoffer Prospectus. We will not receive any of the
proceeds from the sale of these shares of common stock. See "Proceeds from the
Sale of Shares" and "Selling Stockholders."
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RISKS FACTORS
You should carefully consider the following risks before making an
investment decision. The trading price of our common stock could decline due to
any of these risks, and you could lose all or part of your investment. You also
should refer to the other information set forth in this prospectus, including
our combined financial statements and the related notes thereto incorporated by
reference from our filings with the Securities and Exchange Commission. These
are not the only risks and uncertainties that we face. Additional risks and
uncertainties that we do not currently know about or that we currently believe
are immaterial may also harm our business operations. If any of these risks or
uncertainties actually occur, our business, results of operations, financial
condition, or prospects could be materially adversely affected. In such case,
the trading price of our common stock could decline, and you may lose all or
part of your investment.
WE HAVE RECENTLY EXPANDED INTO OUR NEW LINES OF BUSINESS AND PLAN TO
EXPAND INTO OTHER LINES OF BUSINESS. WE HAVE A LIMITED OPERATING HISTORY AND
LACK EXPERIENCE IN THESE NEW LINES OF BUSINESS.
In March of 1999, we abandoned our medical ventures in order to
concentrate on our Internet on-line business. We have only recently diversified
our business and are now offering on-line Internet services. We intend to
provide Internet access and content services to the consumer and business
markets and intend to expand into providing three dimensional virtual chat
rooms, game rooms, virtual reality business conference rooms as well as other
virtual reality based services and activities. We have limited or no operating
histories in each of these new or proposed lines of business and therefore our
historical financial information is of limited value in projecting our future
results. Our future success in these new markets which we have recently entered
and plan to enter in the future is, therefore, difficult to evaluate.
IF WE ARE UNABLE TO EFFECTIVELY MANAGE OUR EXPANDED OPERATIONS, OUR
BUSINESS COULD BE ADVERSELY AFFECTED.
We have experienced rapid growth in the past year in some of our new
lines of business and expect to continue to experience rapid growth in all of
our new and proposed lines of business over the next several years. This growth
has placed, and will continue to place, a significant strain on our management
and other resources. Our ability to manage our growth will require us to
continue to improve our operational, financial and management information
systems, and to motivate and effectively manage our employees. Among other
things, we will need to hire and integrate new managers and install and operate
new or enhanced accounting, financial management and information systems. If we
are unable to manage our growth effectively, the quality of our products and
services, our ability to identify, hire and retain key personnel and our
business, financial condition and operating results could be adversely affected.
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OUR SUCCESS DEPENDS ON OUR ABILITY TO RETAIN OUR CURRENT MANAGEMENT TEAM
AND RECRUIT ADDITIONAL KEY MANAGEMENT AND TECHNICAL PERSONNEL.
Our future success depends to a large extent upon the continued services
of key managerial and technical employees and our ability to recruit, assimilate
and retain other highly qualified employees. Competition for personnel is
intense. There can be no assurance that we will be able to recruit, assimilate
and retain such personnel. The loss of the services of any of our key employees
or our inability to recruit and retain quality personnel could have a material
adverse effect on our business. We do not currently maintain life insurance on
the lives of any of our key employees.
IN ORDER TO COMPETE SUCCESSFULLY, WE MUST KEEP PACE WITH THE RAPID
CHANGES INVOLVING TECHNOLOGY AND THE INTERNET.
We intend to compete in the Internet portal, Internet content and
commerce services, Internet-based virtual reality services markets. Each of
these markets is characterized by rapid technological advances, changes in
customer requirements and frequent new product and services introductions and
enhancements. Our future success will depend upon our ability to enhance our
current products and services and to develop and introduce new products and
services that keep pace with technological developments, respond to the growth
in the Internet, encompass evolving customer requirements and achieve market
acceptance. Any failure on our part to anticipate or respond adequately to
technological developments and customer requirements, or any significant delays
in product development or introduction, could result in a loss of
competitiveness, revenues, profit margins or market share. There is no assurance
that new products or product enhancements which we develop will achieve market
acceptance.
IF WE ARE UNABLE TO DEVELOP STRATEGIC RELATIONSHIPS WITH CONTENT AND
COMMERCE PROVIDERS, OUR INTERNET PORTAL BUSINESS COULD BE ADVERSELY AFFECTED.
Strategic relationships with content and commerce providers are critical
to our success in our Internet portal business. We are in the process of
negotiating a number of third party relationships with content and commerce
providers. We expect that most of these relationships will not be exclusive and
will be short-term or can be terminated for convenience. We cannot assure you
that we will be successful in entering into any of these relationships or, if we
do, that any such relationship will result in attractive content and commerce
offerings. If we are unable to deliver valuable content and commerce through our
Internet portal, we will be unable to attract and retain a significant number of
users, subscribers and advertisers, and, as a result, our revenue from commerce
and advertising will not meet our expectations, and our business, financial
condition and operating results would be adversely affected.
IF WE DO NOT BUILD BRAND NAME AND REPUTATION QUICKLY, OUR ABILITY TO
ATTRACT AND RETAIN CUSTOMERS COULD BE ADVERSELY AFFECTED.
We believe it is critical to establish, maintain and strengthen our
reputation and brand in order to establish and expand our customer base. We also
believe that as the markets in which we
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currently compete and plan to compete become increasingly competitive, the
importance of reputation and brand will increase. If our initial brand-building
efforts are unsuccessful, we may not experience an increase in Internet traffic
needed to generate sufficient revenues to offset the increase in marketing
expenses. As a result, our operating results and financial condition could be
adversely affected. Our Internet portal will be more attractive to advertisers
if we have a large audience of consumers with demographic characteristics that
advertisers perceive as favorable. Therefore, we intend to introduce additional
and enhanced content and commerce offerings, interactive tools and other
services and features in the future in an effort to retain our current
subscribers and users and to attract new ones. Our reputation and brand name
could be adversely affected if we are unable to enhance our Internet portal
successfully.
The unpredictability of our quarterly operating results may cause the
price of our common stock to decline.
Our quarterly operating results have varied in the past and may continue
to fluctuate significantly in the future due to a number of factors, many of
which are beyond our control. If our operating results do not meet the
expectations of securities analysts or investors, our stock price may decline.
Fluctuations in our operating results may result from a number of factors,
including the following:
- the level of advertising and e-commerce activity on our
special interest portal;
- the prices which we are able to charge for our products and
services;
- the amount and timing of capital expenditures and other
costs relating to the expansion of our Internet network;
and
- general economic conditions.
We plan to increase our expenditures for our sales and marketing
operations, expand and develop content and enhance our technology and
infrastructure development. Many of our expenses are relatively fixed in the
short-term. We cannot assure you that our revenues will increase in proportion
to the increase in our expenses. We may be unable to adjust spending quickly
enough to offset any unexpected revenues shortfall. This could lead to a
shortfall in revenues in relation to our expenses.
WE COULD EXPERIENCE SYSTEM FAILURES THAT PREVENT US FROM OPERATING OUR
INTERNET BUSINESS.
Our business depends on the efficient and uninterrupted operation of our
computer hardware and software systems. In addition, we rely on the Internet
and, accordingly, depend upon the continuous, reliable and secure operation of
Internet servers, related hardware and software and network infrastructure. We
have a back-up data facility. Although we have
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designed our system for complete redundancies of all major computer components,
we cannot be sure that our system will be fail-safe. As a result, failure of key
primary or back-up systems to operate properly could lead to a loss of
customers, damage to our reputation and violations of our Internet service
provider license and contracts with corporate customers. These failures could
also lead to a decrease in the value of our common stock, significant negative
publicity and litigation.
Our computer and communications hardware are protected through physical
and software safeguards. However, they remain vulnerable to fire, storm, flood,
power loss, power surges, telecommunications failures, physical or software
break-ins, software viruses and similar events. We do not carry business
interruption insurance to protect us in the event of a catastrophe, even though
such an event could lead to a significant negative impact on our business. Any
sustained disruption in Internet access provided by third parties could also
have a material adverse effect on our business.
OUR BUSINESS MODEL IS UNPROVEN AND CHANGING
Our business model also consists of providing businesses and merchants
with e-commerce enabling solutions. We have limited experience as a company and,
additionally, the Internet, on which our business model relies, is still
unproven as a business medium. Accordingly, our business model may not be
successful, and we may need to change it. Our ability to generate sufficient
revenues to achieve profitability will depend, in large part, on our ability to
successfully market our e-commerce products and services to businesses and
merchants that may not be convinced of the need for an online presence or may be
reluctant to rely upon third parties to develop and manage their e-commerce
offerings and marketing efforts.
WE FACE SIGNIFICANT COMPETITION
The market for Internet portals, e-commerce enabling products and
services and online marketplaces is highly competitive, and we expect
competition to intensify in the future. Barriers to entry are not significant.
Our failure to compete effectively could result in the following:
- fewer businesses and merchants relying upon our enabling
solutions;
- the obsolescence of the technology underlying our products
and services;
- fewer businesses and merchants listed in our directories;
- a decrease in shopper traffic on our web sites; and
- a reduction in the prices of or profits on our products and
services.
The number of companies providing e-commerce enabling products and
services is large and increasing at a rapid rate. We expect that additional
companies which to date have not had a substantial commercial presence on the
Internet or in our markets will offer competing products and services. Some
companies that currently offer a range of e-commerce enabling solutions as
comprehensive as our products and services, include companies such as Yahoo!,
America On-line, Compuserve, Prodigy and Geocities.
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These competitors and other of our competitors and potential competitors
have substantial competitive advantages as compared to us, including:
- larger customer or user bases;
- the ability to offer a wider array of e-commerce products
and solutions;
- greater name recognition and larger marketing budgets and
resources;
- substantially greater financial, technical and other
resources;
- the ability to offer additional content and other
personalization features; and
- larger production and technical staffs.
These advantages may enable our competitors to adapt more quickly to new
technologies and customer needs, devote greater resources to the promotion or
sale of their products and services, initiate or withstand substantial price
competition, take advantage of acquisition or other opportunities more readily
or develop and expand their product and service offerings more quickly.
In addition, as the use of the Internet and online products and services
increases, larger well-established and well-financed entities may continue to
acquire, invest in or form joint ventures with providers of e-commerce enabling
solutions, and existing providers may continue to consolidate. Providers of
Internet browsers and other Internet products and services who are affiliated
with providers of web directories and information services that compete with our
products and services may more tightly integrate these affiliated offerings into
their browsers or other products or services. Any of these trends would increase
the competition we face.
OUR ABILITY TO DEVELOP AND INTEGRATE E-COMMERCE TECHNOLOGIES IS SUBJECT
TO UNCERTAINTIES.
We have limited experience delivering our e-commerce products and
services and operating online marketplaces. In order to remain competitive, we
must regularly upgrade our e-commerce products and services to incorporate
current technology, which requires us to integrate complex computer hardware and
software components. If we do not successfully integrate these components, the
quality and performance of our online offerings may be reduced. In addition, the
ability of our online marketplaces to accommodate an increasing number of
businesses, merchants and shoppers would suffer. While these technologies are
generally commercially available, we may be required to expend considerable time
and money in order to successfully integrate them into our products and services
and this may cause our business to suffer. We must also maintain an adequate
testing and technical support infrastructure to ensure the successful
introduction of products and services.
OUR BUSINESS MAY BE HARMED BY DEFECTS IN OUR SOFTWARE AND SYSTEMS.
We have developed custom software for our network servers and have
licensed additional software from third parties. This software may contain
undetected errors or defects. Although we have not suffered significant harm
from any errors or defects to date, we may discover significant
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errors or defects in the future that we may be unable to fix in a timely or
cost-effective manner.
WE WILL NEED TO EXPAND AND UPGRADE OUR SYSTEMS IN ORDER TO MAINTAIN
CUSTOMER SATISFACTION.
We must expand and upgrade our technology, transaction processing systems
and network infrastructure if the number of businesses and merchants using our
e-commerce products and services and online marketplaces, or the volume of
traffic on our web sites or our clients' web sites, increases substantially. We
could experience periodic capacity constraints, which may cause unanticipated
system disruptions, slower response times and lower levels of customer service.
We may be unable to accurately project the rate or timing of increases, if any,
in the use of our products or services or our web sites or when we must expand
and upgrade our systems and infrastructure to accommodate these increases in a
timely manner. Any inability to do so could harm our business.
WE MAY REQUIRE ADDITIONAL FUNDING TO SUCCESSFULLY OPERATE AND GROW OUR
BUSINESS.
Although we believe that our cash reserves and cash flows from operations
will be adequate to fund our operations for at least the next twelve months,
these resources may be inadequate. Consequently, we may require additional funds
during or after this period. Additional financing may not be available on
favorable terms or at all. If we raise additional funds by selling stock, the
percentage ownership of our then current shareholders will be reduced. If we
cannot raise adequate funds to satisfy our capital requirements, we may have to
limit our operations significantly. Our future capital requirements depend upon
many factors, including, but not limited to:
- the rate at which we expand our sales and marketing
operations and our product and service offerings;
- the extent to which we develop and upgrade our technology
and data network infrastructure; and
- the occurrence, timing, size and success of acquisitions.
UNAUTHORIZED USE OF OUR INTELLECTUAL PROPERTY BY THIRD PARTIES MAY DAMAGE
OUR BRAND.
We regard our current and future copyrights, service marks, trademarks,
trade secrets and other intellectual property as critical to its success. We
will rely on trademark and copyright law, trade secret protection and
confidentiality agreements with its employees, customers, partners and others to
protect its intellectual property rights. Despite our precautions, it may be
possible for third parties to obtain and use our intellectual property without
authorization. It may be difficult for us to enforce certain of our intellectual
property rights against third parties who may have acquired intellectual
property rights by filing unauthorized applications in foreign countries. Since
Internet related industries are exposed to the intellectual property laws of
numerous foreign countries and trademark rights are territorial, there is
uncertainty in the enforceability and the scope of protection such intellectual
property laws may afford us. The unauthorized use of our
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intellectual property by third parties may damage our brand name.
OUR TECHNOLOGY MAY INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS.
Although we have not received notice of any alleged infringement by us,
we cannot be certain that our technology does not infringe issued patents or
other intellectual property rights of others. In addition, because patent
applications in the United States are not publicly disclosed until the patent is
issued, applications may have been filed which relate to our software. We may be
subject to legal proceedings and claims from time to time in the ordinary course
of our business, including claims of alleged infringement of the trademarks and
other intellectual property rights of third parties. Intellectual property
litigation is expensive and time-consuming, and could divert our management's
attention away from running our business. If the security provided by our
e-commerce services is breached we may be liable to our clients and our
reputation could be harmed
OUR NETWORK MAY BE VULNERABLE TO SECURITY RISKS.
Our success depends on our ability to provide superior network security
protection and the confidence of our customers in that ability. Our system is
designed to prevent unauthorized access from the Internet and, to date, our
operations have not been affected by security breaks; nevertheless, in the
future we may not be able to prevent unauthorized disruptions of our network
operations, whether caused unintentionally or by computer "hackers." Due to the
sensitive nature of the information contained on the websites hosted by us, our
websites may be targeted by hackers. As such, disruptions may result in
liability to us and harm to our customers, and our failure to prevent such
disruptions would have a material adverse effect on our business and financial
results.
OUR SUCCESS DEPENDS ON CONTINUED INCREASES IN THE USE OF THE INTERNET AS
A COMMERCIAL MEDIUM.
We depend on the growing use and acceptance of the Internet by
businesses, merchants and shoppers as a medium of commerce. Rapid growth in the
use of and interest in the Internet and online products and services is a recent
development. No one can be certain that acceptance and use of the Internet and
online products and services will continue to develop or that a sufficiently
broad base of businesses, merchants and shoppers will adopt and continue to use
the Internet and online products and services as a medium of commerce.
The Internet may fail as a commercial marketplace for a number of
reasons, including potentially inadequate development of the necessary network
infrastructure or delayed development of enabling technologies, including
security technology and performance improvements. For example, if technologies
such as software that stops advertising from appearing on a web user's computer
screen gain wide acceptance, the attractiveness of the Internet to advertisers
would be diminished, which could harm our business.
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<PAGE> 15
FUTURE GOVERNMENTAL REGULATION AND PRIVACY CONCERNS COULD ADVERSELY
AFFECT OUR
BUSINESS.
We are not currently subject to direct regulation by any government
agency, other than regulations applicable to businesses generally, and there are
currently few laws or regulations directly applicable to access to or commerce
on the Internet. However, due to the increasing popularity and use of the
Internet, a number of legislative and regulatory proposals are under
consideration by federal, state, local and foreign governmental organizations,
and it is possible that a number of laws or regulations may be adopted with
respect to the Internet relating to issues such as user privacy, taxation,
infringement, pricing, quality of products and services and intellectual
property ownership. The adoption of any laws or regulations that have the effect
of imposing additional costs, liabilities or restrictions relating to the use of
the Internet by businesses or consumers could decrease the growth in the use of
the Internet, which could in turn decrease the demand for our products and
services, decrease traffic on our online marketplaces, increase our cost of
doing business, or otherwise have a material adverse effect on our business.
Moreover, the applicability to the Internet of existing laws governing issues
such as property ownership, copyright, trademark, trade secret, obscenity, libel
and personal privacy is uncertain and developing. Any new legislation or
regulation, or application or interpretation of existing laws, could have a
material adverse effect on our business.
WE COULD FACE LIABILITY FOR MATERIAL TRANSMITTED OVER THE INTERNET BY
OTHERS.
Because material may be downloaded from web sites hosted by us and
subsequently distributed to others, there is a potential that claims will be
made against us for negligence, copyright or trademark infringement or other
theories based on the nature and content of this material. Negligence and
product liability claims also potentially may be made against us due to our role
in facilitating the purchase of some products. Any insurance we carry may not
cover claims of these types, or may not be adequate to indemnify us against this
type of liability. Any imposition of liability, and in particular liability that
is not covered by our insurance or is in excess of our insurance coverage, could
have a material adverse effect on our reputation and our operating results, or
could result in the imposition of criminal penalties on us.
THE SO CALLED "PENNY STOCK RULE" COULD MAKE IT CUMBERSOME FOR BROKERS AND
DEALERS TO TRADE IN THE COMMON STOCK, MAKING THE MARKET FOR THE COMMON STOCK
LESS LIQUID WHICH COULD CAUSE THE PRICE OF OUR STOCK TO DECLINE.
Trading in our securities is conducted on the OTC Bulletin Board. As long
as the common stock is not quoted on Nasdaq or at any time that we have less
than $2,000,000 in net tangible assets, trading in the common stock is covered
by Rule 15g-9 under the Securities Exchange Act of 1934 for non-Nasdaq and
non-exchange listed securities. Under that rule, broker-dealers who recommend
covered securities to persons other than established customers and accredited
investors must make a special written suitability determination for the
purchaser and receive the purchaser's written agreement to a transaction prior
to sale. Securities are exempt from this rule if the market price is at least
$5.00 per share.
The SEC has adopted regulations which generally define a penny stock to
be any equity
13
<PAGE> 16
security which has a market price of less than $5.00 per share, subject to
certain exemptions. Such exemptions include an equity security listed on Nasdaq
and an equity security issued by an issuer which has (i) net tangible assets of
at least $2,000,000, if such issuer has been in continuous operation for three
(3) years; (ii) net tangible assets of at least $5,000,000, if such issuer has
been in continuous operation for less than three (3) years; or (iii) average
revenue of at least $6,000,000 for the proceeding three (3) years. Unless such
an exemption is available, the regulations require the delivery of a disclosure
schedule explaining the penny stock market and the risks associated therewith
prior to any transaction involving a penny stock. If our common stock becomes
subject to the regulations on penny stocks, that factor could have a severe
adverse effect on the market liquidity for the common stock due to these
limitations on the ability of broker-dealers to sell the common stock in the
public market which could cause the price of our stock to decline.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus includes and incorporates forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. All statements, other than statements of
historical facts, included or incorporated in this prospectus regarding our
strategy, future operations, financial position, future revenues, projected
costs, prospects, plans and objectives of management are forward-looking
statements. The words "anticipates," "believes," "estimates," "expects,"
"intends," "may," "plans," "potential," "projects," "will," "would" and similar
expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. We cannot
guarantee that we actually will achieve the plans, intentions or expectations
disclosed in our forward-looking statements and you should not place undue
reliance on our forward-looking statements. Actual results or events could
differ materially from the plans, intentions and expectations disclosed in the
forward-looking statements we make. We have included important factors in the
cautionary statements included or incorporated in this prospectus, particularly
under the heading "Risk Factors", that we believe could cause actual results or
events to differ materially from the forward-looking statements that we make.
Our forward-looking statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or investments we may make.
We do not assume any obligation to update any forward-looking statements.
PROCEEDS FROM SALE OF THE SHARES
All of the shares of common stock in this Reoffer Prospectus are being
offered by the selling stockholders. We will not receive any proceeds from the
sale of the shares of common stock.
SELLING STOCKHOLDERS
The shares offered under our Reoffer Prospectus are being registered for
reoffers and resales by selling stockholders who have acquired their shares of
our common stock under employment agreements. The selling stockholders named in
the following table may resell all, a
14
<PAGE> 17
portion, or none of these shares of our common stock. There is no assurance that
any of the selling stockholders will sell any or all of the shares of our common
stock offered by them.
The following table sets forth certain information concerning the selling
stockholders as of the date of this Reoffer Prospectus, and as adjusted to
reflect the sale by the selling stockholders of the shares of our common stock
offered, assuming sale of all of the shares offered:
<TABLE>
<CAPTION>
Number of Shares
Shares Beneficially Registered by the Shares Beneficially
Name owned prior to Offering (1) Prospectus(2)(3) Owned After Offering
--------------- ------ ------- --------------- ------ ---------
Number Percent Number Percent(4)
------ ------- ------ ---------
<S> <C> <C> <C> <C> <C>
Harry DiFrancesco 2,500,000 16.14% 1,000,000 1,500,000 9.68%
President, Chairman
Andrew S. Peck 300,000 1.9% 100,000 200,000 1.3%
Secretary, Director
Jay Sanet 225,000 1.45% 100,000 125,000 *
Director
</TABLE>
------------------
* - Less than 1%
(1) Represents shares beneficially owned by the named individual, including
shares that such person has the right to acquire within 60 days of the date of
this Reoffer Prospectus. Unless otherwise noted, all persons referred to above
have sole voting and sole investment power.
(2) Includes all Shares issued to such named individuals under their employment
agreements.
(3) Does not constitute a commitment to sell any or all of the stated number of
shares of common stock. The number of shares of common stock offered shall be
determined from time to time by each selling stockholder in his or her sole
discretion.
(4) Based upon 15,493,825 Shares outstanding as of November 12, 2000.
HOW THE SHARES MAY BE DISTRIBUTED
The selling stockholders may sell shares of our common stock in various
ways and at various prices. Some of the methods by which the selling
stockholders may sell their shares of common stock include:
- ordinary brokerage transactions and transactions in which
the broker solicits purchasers;
- privately negotiated transactions;
- block trades in which the broker or dealer will attempt to
sell the shares of common stock
15
<PAGE> 18
as agent but may position and resell a portion of the block as principal to
facilitate the transaction;
- purchases by a broker or dealer as principal and resale by that
broker or dealer for the selling stockholder's account under this
Reoffer Prospectus;
- sales under Rule 144 rather than by using this Reoffer Prospectus;
- a combination of any of these methods of sale; and
- any other legally permitted method.
The applicable sales price may be affected by the type of transaction.
The selling stockholders may also pledge their shares of common stock as
collateral for a margin loan under their customer agreements with their brokers.
If there is a default by the selling stockholders, the brokers may offer and
sell the pledged shares of common stock.
Brokers or dealers may receive commissions or discounts from the selling
stockholders (or, if the broker-dealer acts as agent for the purchaser of the
shares of common stock, from that purchaser) in amounts to be negotiated. These
commissions are not expected to exceed those customary in the types of
transactions involved.
We cannot estimate at the present time the amount of commissions or
discounts, if any, that will be paid by the selling stockholders in connection
with sales of the shares of common stock.
Any broker-dealers or agents that participate with the selling
stockholders in sales of the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended, in
connection with such sales. In that event, any commissions received by
broker-dealers or agents and any profit on the resale of the shares of common
stock purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act of 1933.
Under the securities laws of certain states, the shares of common stock
may be sold in those states only through registered or licensed broker-dealers.
In addition, the shares of common stock may not be sold unless they have been
registered or qualified for sale in the relevant state or unless the shares of
common stock qualify for an exemption from registration or qualification.
We have agreed to pay all fees and expenses incident to the registration
of the shares of common stock.
The selling stockholders and other persons participating in the
distribution of the shares of common stock offered under this Reoffer Prospectus
are subject to the applicable requirements of Regulation M promulgated under the
Securities Exchange Act of 1934, in connection with sales of the shares of
common stock.
16
<PAGE> 19
LEGAL OPINION
Bondy & Schloss LLP, New York, New York, has advised us with respect to
the validity of the securities offered by this prospectus. Bondy & Schloss LLP
serves as general counsel to the Registrant and currently owns 550,000 shares
of Common Stock of the Registrant which shares are being registered herein.
EXPERTS
The financial statements included in our annual report on Form 10-KSB
incorporated by reference in this Reoffer Prospectus have been audited by JH
Cohn LLP, independent public accountants, to the extent and for the periods set
forth in their report incorporated herein by reference, and are incorporated
herein in reliance upon such report given upon the authority of said firm as
experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any report or document we file at the public reference facilities maintained by
the Securities and Exchange Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the Securities and Exchange Commission's regional
offices located at Seven World Trade Center, Suite 1300, New York, New York
10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please
call the SEC at 1-800-SEC-0880 for more information about the public reference
rooms. Our Securities and Exchange Commission filings are also available from
the Securities and Exchange Commission's website located at HTTP://WWW.SEC.GOV.
Quotations for the prices of our common stock appear on the Nasdaq
National Market, and reports, proxy statements and other information about us
can also be inspected at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this Reoffer
Prospectus, and later information that we file with the Securities and Exchange
Commission will automatically update and supersede this information.
We incorporate by reference the following filings and any future filings
made with the Securities and Exchange Commission under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934:
17
<PAGE> 20
The following documents filed by the Registrant with the Commission are
incorporated herein by reference:
- The Registrant's Annual Report on Form10-KSB filed on March
30, 2000.
- The Registrant's Registration of Securities pursuant to
Section 12(g) of the Act dated December 7, 1999.
- Quarterly Report on Form 10-QSB filed on May 18, 2000 for
the quarter ended March 31, 2000.
- Quarterly Report on Form 10-QSB filed on August 14, 2000
for the quarter ended June 30, 2000.
- The description of securities contained in the Registrant's
Registration of Securities pursuant to Section 12(g) of the
Act dated December 7, 1999.
- Our Registration Statement on Form S-8 (File Number
333-35496), filed on April 24, 2000.
We have filed with the Securities and Exchange Commission a registration
statement on Form S-8 under the Securities Act of 1933, as amended, File Number
333-35496, with respect to the common stock covered by this Reoffer Prospectus.
This Reoffer Prospectus, which is a part of the registration statement, does not
contain all the information set forth in, or annexed as exhibits to, the
registration statement, as permitted by the SEC's rules and regulations. For
further information with respect to us and the common stock offered under this
Reoffer Prospectus, please refer to the registration statement, including the
exhibits, copies of which may be obtained from the locations described above.
Statements concerning any document filed as an exhibit are not necessarily
complete and, in each instance, we refer you to the copy of the document filed
as an exhibit to the registration statement.
You may request, at no cost, a copy of any or all of the information
incorporated by reference by writing or telephoning us at: Norstar Group, Inc.,
6365 NW 6th Way, Suite 160, Ft. Lauderdale, Florida, (954) 772-0240.
You should only rely on the information incorporated by reference or
provided in this Reoffer Prospectus or any supplement. We have not authorized
anyone else to provide you with different information. Our common stock is not
being offered in any state where the offer is not permitted. You should not
assume that the information in this Reoffer Prospectus or any supplement is
accurate as of any date other than the date on the front of those documents.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Utah Business Corporation Act (the "UBCA"), in general, allows
corporations to indemnify their directors and officers against expenses actual
and reasonable incurred in connection
18
<PAGE> 21
with a proceeding, if the person acted in good faith and in a manner the person
reasonably believed to be in, or not opposed to, the best interests of the
corporation. In the case of a criminal action or proceeding, the director or
officer must have had no reasonable cause to believe that the person's conduct
was unlawful. A corporation may not indemnify a director (a) in connection with
a proceeding by or in the right of the corporation in which the director was
adjudged liable to the corporation, or (b) in connection with any other
proceeding charging that the director derived an improper personal benefit,
whether or not involving action in his official capacity, in which proceeding he
was adjudged liable on the basis that he derived an improper personal benefit.
19
<PAGE> 22
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Registrant with the Commission are
incorporated herein by reference:
(a)(i) The Registrant's Annual Report on Form10-KSB filed
on March 30, 2000.
(ii) The Registrant's Registration of Securities pursuant
to Section 12(g) of the Act dated December 7, 1999.
(b)(i) Quarterly Report on Form 10-QSB filed on May 18,
2000 for the quarter ended March 31, 2000.
(b)(ii) Quarterly Report on Form 10-QSB filed on August 14,
2000 for the quarter ended June 30, 2000.
(c)(i) The description of securities contained in the
Registrant's Registration of Securities pursuant to
Section 12(g) of the Act dated December 7, 1999.
(c)(ii) Registration Statement on Form S-8 (File Number
333-35496), filed on April 24, 2000.
In addition, all documents subsequently filed by the Registrant pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment which indicates that all securities registered
hereby have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of the filing of such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable
II-1
<PAGE> 23
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Bondy & Schloss LLP serves as general counsel to the Registrant and
currently owns 550,000 shares of Common Stock of the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Utah Business Corporation Act (the "UBCA"), in general, allows
corporations to indemnify their directors and officers against expenses actual
and reasonable incurred in connection with a proceeding, if the person acted in
good faith and in a manner the person reasonably believed to be in, or not
opposed to, the best interests of the corporation. In the case of a criminal
action or proceeding, the director or officer must have had no reasonable cause
to believe that the person's conduct was unlawful. A corporation may not
indemnify a director (a) in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the corporation, or
(b) in connection with any other proceeding charging that the director derived
an improper personal benefit, whether or not involving action in his official
capacity, in which proceeding he was adjudged liable on the basis that he
derived an improper personal benefit.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
5.1 * Opinion of Bondy & Schloss LLP as to the legality of the securities
being offered.
23.1 * Consent of Bondy & Schloss LLP (included in Exhibit 5.1).
23.2 * Consent of J.H. Cohn LLP.
23.3 *Awareness Letter of Independent Public Accountants.
24.1 * Powers of Attorney (included on p. II-5 of this Registration Statement)
99.1 *Employment Agreement between the Registrant and Harry DiFrancesco.
99.2 *Employment Agreement between the Registrant and Andrew S. Peck.
99.3 *Employment Agreement between the Registrant and Jay Sanet.
</TABLE>
-----------
* - Filed herewith
II-2
<PAGE> 24
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement to include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement; (2) That, for
the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof; and (3) To remove from
registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that, in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Ft. Lauderdale, Florida on the 21st day of November, 2000.
NORSTAR GROUP, INC.
By: /s/ Harry DiFrancesco
-------------------------------------
Harry DiFrancesco, President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the 21st day of November, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Harry DiFrancesco President and Chairman of the Board
----------------------------------
Harry DiFrancesco
/s/ Andrew S. Peck Vice President o f Finance, Secretary and Director
----------------------------------
Andrew S. Peck
/s/ Maynard Neil Abogov Vice President of Sales Management and Director
----------------------------------
Maynard Neil Abogov
/s/ Jay Sanet Vice President of Corporate Development and
----------------------------------
Jay Sanet Director
</TABLE>
II-4
<PAGE> 26
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Harry DiFrancesco, his true and lawful
attorneys-in-fact and agent with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) of and supplements to
this Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, to all intents and purposes and as fully
as they might or could do in person, hereby ratifying and confirming all that
such attorneys-in-fact and agent, or his substitute, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Power of Attorney has been signed by the following persons in the
capacities indicated on the 21st day of November, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Harry DiFrancesco President and Chairman of the Board
-------------------------------
Harry DiFrancesco
/s/ Andrew S. Peck Vice President o f Finance, Secretary and Director
-------------------------------
Andrew S. Peck
/s/ Maynard Neil Abogov Vice President of Sales Management and Director
-------------------------------
Maynard Neil Abogov
/s/ Jay Sanet Vice President of Corporate Development and
------------------------------- Director
Jay Sanet
</TABLE>
II-5
<PAGE> 27
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
5.1 * Opinion of Bondy & Schloss LLP as to the legality of the securities being offered.
23.1 * Consent of Bondy & Schloss LLP (included in Exhibit 5.1).
23.2 * Consent of J.H. Cohn LLP.
23.3 *Awareness Letter of Independent Public Accountants.
24.1 * Powers of Attorney (included on p. II-5 of this Registration Statement)
99.1 *Employment Agreement between the Registrant and Harry DiFrancesco.
99.2 *Employment Agreement between the Registrant and Andrew S. Peck.
99.3 *Employment Agreement between the Registrant and Jay Sanet.
</TABLE>
-----------
* - Filed herewith
